Watch the money

Luke Pacioli takes us through some of the intricacies of diocesan accounting to reveal how weak are the supposed safe-guards which General Synod wishes to put in place with regard to parsonages

'I thank God we haven't talked about money. We should be about I the love of God and mission. We should trust each other.' So began one maiden speech at our diocesan synod. The draftsmen of the 1983 Pastoral Measure (as amended) perhaps took a less Pollyanna-ish, more Augustine (late period) view of the workings of the senior workers in the Lord's vineyard, and their legislation for parsonages which have become redundant or sold off has the reputation for being fiercely ring-fenced. But, as Gordon Brown could tell you, legislation designed to make people play fair with money merely encourages people to find ways around the law.

Diocesan accounts

Since it is now proposed that parsonages should be put in trust with Diocesan Boards of Finance (DBF) and one of the arguments is that this will not harm parishes, because the parsonages and monies arising from their sale are ring-fenced, it seemed worthwhile exploring whether Church Commissioners' ring-fencing is any more effective than the Maginot Line. Ingenious readers of NEW DIRECTIONS maybe encouraged by what follows to think up their own schemes; wily diocesan treasurers may laugh at the simplicity and ignorance.

Since 1995, parsonages have been included in diocesan accounts, generally with a note stating that that the parsonage can only be sold when there is no incumbent, or when the priest in charge is moved to a different property. This is based on an understanding of the Charities Act 1993 as interpreted by Financial Reporting Standard 15.

Restricted income?

Financial statements are designed to do no more than reflect as far as possible the legal situation, and the legal situation of parsonages is complex. Arguments could have been made for parsonages to be included in parish accounts; after all, that is where the asset is used, and the current treatment suggests that the default setting for the parish is that it has no priest. But then what would diocesan accounts look like without parsonages?

However, the inclusion of parson-

ages in diocesan accounts does not give dioceses the right to sell them and use the proceeds willy nilly Under the 1983 Pastoral Measure (as amended), there are limits on what can be done with parsonages transferred to a DBF, just as there are limits to what can be done with glebe.

At one level, those strict limits are irrelevant. When the DBF takes over a parsonage or glebe, that should give rise to income which, at least for glebe, is

when a diocese sells a parsonage, the benefit need not flow through directly to the parishes

intended to be spent on stipends or parsonages - it is restricted income. But stipends are the largest cost in any diocese, and parsonages often come second. If the income from the (restricted) stipends account is increased, this will usually mean that an equivalent income from the quota need no longer be put to stipends (this presumes that the amount of quota is stable). And quota money which no longer goes on stipends can go anywhere. So, unless the stipend/parsonage cost falls considerably, when a diocese sells a parsonage the benefit need not flow through to the parishes. Indeed, there may be an extra saving with the reduction in payroll with one less minister, thus freeing up even more of the quota.

Unfortunately, the sums involved, say 30k p.a. from the reduction in posts and another 3 Ok as the annual return on the sale of a 500k parsonage, though not small, are not enough to fund serious fresh expressions or grands projets. To do this needs more income, and, above all, capital.

But it is 'releasing' the capital value of parsonages which is precisely what we might expect the rules are designed to prevent. Under the Measure, when a parsonage is transferred to a DBF under a pastoral scheme (at this point the provisions are essentially the same under the Endowments and Glebe Measure, 1976), the assets are to be allocated to the dioc-

esan stipends capital account or the diocesan pastoral account, though the first call on funds is to a replacement parsonage, if necessary.

Lack of regulation

The stipends account is basically legislated for in the Diocesan Stipends Funds Measure 1953 (one of the first pieces of legislation passed by Her Majesty). This established capital and income accounts for the fund, the allocation of assets between them ,and the transfer of assets between them being at the discretion of bishop and DBF unless expressly stipulated by any donor. Assets in the capital account can be used to purchase investments or improve investment property or glebe (what kind of property is your Diocesan Office?). Income arising in the income account maybe used for stipends or the maintenance of parsonages. Hence central staff who have part-time posts: their cure of souls means they can be paid out of the stipends account. But beyond that, money from the stipends accounts is tightly regulated.

The pastoral account (which is not split between income and capital) is much broader in application. Once the expenses of operating the account have been met, the DBF may 'apply..moneys by way of grant or loan to the provision, restoration, improvement or repair of churches and parsonage houses in the diocese, including the repair of any redundant building vested in the board pending the coming into operation of arrangements under a redundancy scheme, or to other purposes of the diocese or any benefice or parish in the diocese' (s.78.3 (a)). In other words, parsonages can be sold off and the proceeds used for whatever purpose the diocese thinks fit. Not much of a ring-fence.

And it is to the pastoral account that the proceeds of parsonages are usually put. Once the parsonages are vested in DBFs there is much less a parish can do to prevent their sale. Since the proposals before General Synod are no more than a case of 'tidying up,' talk of a land grab or asset-stripping are presumably no more than an expression of the narrow, selfish view of the parochially-minded. After all, if we cannot trust the bishops and their senior staff, where would we be? |jyp|

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